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APR 2017 FOOD FOCUS THAILAND
STORAGE, HANDLING
&LOGISTICS
During the last 10 years, food producers, logistics service
providersanddistributors,and retailershavebeen trying to team
up and form a supply-chain alliance across the food industry.
Logistics management concepts have been adopted with the
hope tosolvehigh-costproblemsand toreinforcecompetitiveness
of the group by increasing efficiency in distribution, reducing
inventorycost,andengagingstrategyonend-consumerdelivery.
Still, we have to bear inmind the complexity of food industry, due to the
consumers’behaviorsaswellas thespoilagenatureof theproduct itself.Limited
shelf-life of some fresh food products calls for a cold storage, which triggers
the soaring inventory cost. In this article, we will be discussing the use of
logistics management to develop supply chain system and boost up
competitiveness across the food industry.
TheNewSupplyChainSystemof theFood Industry
The leadingdeveloper in food retail sector,Wal-Mart,hasadopted theprinciple
of “Share Information”, which collects data from thewhole loop, starting from
downstream consumers up to producers. With the help of electronic
replenishment system, high inventory-costs of food products have been
efficiently reduced,hence the lowerproductssellingprice.Thiseffectivesystem
hascontributed toWal-Mart’shighercompetitiveness thatdrove itup the ladder
as the leader in retail system.
Wal-Mart has integrated theuseof anelectronicsystem into the inventory
management, by using the “ElectronicData Interchange” systemor EDI. This
computerized system oversees the complex entanglement of supply chain
systemwithin the food industry [1], fromsuppliers toproducersand toWal-Mart
itself. Streamsof dataarecontinuouslyflowing through, andcalculatedby the
computer (Kinsley [2], 2000). This setup has made the Just in Time freight
management possible, helpedpreventing the inventoryshortage, reduced the
inventorycost andassisted theoperators inmanagingproduction line toavoid
overproduction.Once the rawmaterialand inventoriesarekeptat theoptimum
level, the costs in the supply chain system are consequently lowered, which
lead to the lower overall-costs of the products.
However, due to the fact that many different technologies are used by
operatorswithin the industry, aswell as thevariousmethodsof productionand
differences inconsumptionpatterns, it isconsiderablydifficult tocomeupwith
one unified electronic system for the whole industry. In order to solve this
problem, thenon-profitorganizationby thenameUniformCodeCouncil (UCC)
wasestablishedwith themain task to initiateuniformCodesandbasicsystems
for the food industry.UCC’smain function is tobuildupanopen-systemnetwork
thatcanbeaccessedbyall theplayers,buildupalliances,aswellas toestablish
an electronic system that is the starting point of the Business-to-Business
relationship (B2B Relationship). With this new system, which is called the
UCCNET, datawill be collected, circulated and linkedwithin thewhole chain,
from the producers to the end consumers. Inventory costs, over-stock of raw
materials and inventory will all be reduced, leading to the lower overall costs
in the supply chain. Electronic system has also been used in industries that
เอกสารอ้
างอิ
ง/References
[1] Matopoulos, A., Vlachopoulou, A., Manthou, V., andManos, V., (2007) Aconcept framework
for supply chaincollaboration: empirical evidence from theagri-food industry, SupplyChain
Management: An International Journal, Vol. 12(3), PP. 177-186
[2] Kinsley, J. (2000), “A faster, leaner, supply chain: newuses of information technologies”,
American Journal of Agricultural Economics, Vol. 14, No. 2
[3] Aghazadeh, S.M., (2004), Improving logistics operations across the food industry supply chain,
International Journal of ContemporaryHospitalityManagement, Volume16, No.4, PP. 263-268
rely largely on direct delivery such as short shelf-life products like bread and
ice-cream.
Onedrawbackof UCCNET, however, is that thereare still a lot of different
kinds of technology used in retail sector, especially in small supermarkets.
Improvementsweremade toaccommodate thesedifferencesandanew internet
networkingsystemcalled theWorldWideRetailersExchangeLwas introduced.
Thisnewer systemhasdrawnmoreplayers from thesupplychainsystem, and
helped reduce costs for thewhole supply chain loop.
TheApplicationofLogisticsManagementSystemwithin
theFood Industry
Logistics, inanutshell, is theplanning,managingand transportingof goods to
the rightplace,at the right time, in the rightamountand ingoodcondition,within
thecompatibleprice range. Inorder toapply logisticssystem to the food industry,
theabove-mentionedprinciplehas tobe fully realized.Aspreviouslymentioned
in the caseofWal-Mart, thereare several importantmatters tobe considered,
whether it be theaccurateestimationofmarket’sdemand, effectivepurchasing
systemand timelyproduct delivery. For the logistics system toworkefficiently,
adjustments should bemade on the following systems [3].
•Management system
• InformationTechnologysystem (IT).The implementationof theLogistics
Management InformationSystem (LMIS),which isaveryeffectivedata-gathering
system, can help acquire accurate data on customers’ requirements and
demands, which canbringabout thepreciseestimationof demandswithin the
supply chain, reducing undue lost and production costs.
• Forecast and purchasing systems
• Distributionand transportation systems
• Efficiencyof personnel andstaff.All personnel have toacknowledge the
importanceof supply chain systemandappreciate the roleof logistics system
in solvingproblemswithin the supply chain network.
Conclusion
Businessoperatorsnowareexploringwaysandmeans to cut overall costs, to
enhance theeffectivenessof theirmanufacturingsystems, and toexpand their
networks of alliance to achieve higher profit for their setups. The advanced IT
systemmakes it possible for the producers to learn the demands for each
product in real time. Its applications in various systems, such as purchasing,
manufacturing, transportation and inventory management, help increase
efficiency of the whole process and decrease costs in food industry supply
chain, just as discussed inWal-Mart case.
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PongtanaVanichkobchinda, Ph.D.
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